Sunday, May 17, 2009

This Scandal Just Got a Whole Lot Worse

The expenses scandal takes a new twist tonight. The Telegraph reveals that the House of Commons Fees Office has been complicit in allowing MPs to overclaim thousands of pounds in illicit mortgage claims.

House of Commons officials colluded with MPs to let them make inflated claims on their mortgages, leaked internal documents seen by The Daily Telegraph have disclosed. Parliamentary authorities, overseen by Michael Martin, the Speaker, gave secret permission for some MPs to over-claim for thousands of pounds in home loan interest in deals that led to the systematic abuse of the taxpayer-funded expenses system.

Ben Chapman, a Labour MP, admitted last night that he was allowed to continue claiming for interest payments on his entire mortgage after repaying £295,000 of the loan in 2002. Over 10 months the arrangement allowed Mr Chapman to receive £15,000 for the part of the home loan which had been paid off. Last night, he said he would not give back the money.

Permission to claim “phantom” mortgage payments is understood to have been offered to several MPs before 2004. It was stopped after Commons officials admitted it should never have been allowed. Michael Martin has been Speaker since 2000 and was therefore ultimately responsible for the arrangements – which has never been independently investigated. The arrangements – for which the justification is not clear – came to light in the claims files of Mr Chapman, the Labour MP for Wirral South.

Mr Chapman, who has been a ministerial aide, approached the fees office at the end of 2002 to explain that he was repaying £295,939 of the mortgage on his designated second home in Lambeth, south-east London. This reduced the interest payments – met by the taxpayer – from £1,900 to £400 per month.

“By paying off capital I am forgoing interest and investment opportunities elsewhere,” he told the fees office.

He and an official “thus agreed that the mortgage should remain for ACA (Additional Costs Allowance) purposes at the original amount”.

An email between senior officials within the fees office discusses Mr Chapman’s case and discloses that it is not unique. “… I have heard similar arrangements being agreed to in the past,” one said. “Personally, I do not believe that such an arrangement should ever have been suggested.”

Things just got a whole lot worse. Someone in Parliament must take responsibility for the laxity of the Fees Office. Ultimately the Speaker is responsible, but there are officials who earn six figure salaries who need to be held to account too. They should be named and shamed. And then sacked.


The Watcher said...

Isn't this Conspiracy to Defraud?

digger said...

holy smoly!!!!

this has jsust got a whole lot worse and i didn't really think it could.

Anonymous said...

They should be named and shamed. And then sacked.Fuck sacking them. Conspiring to make false claims is fraud -- they should go to prison.

This is more than just a few bent MPs, it's intitutional corruption, and needs to be rooted out, so that in future MPs know they can't get away with such behaviour.

Dual Citizen said...

Not surprised to hear this at all.

Oliver Drew said...

Surely this just went from Parliamentary crisis to Constitutional crisis?

Perhaps I'm overegging it slightly, but we now apparently have people behind the scenes colluding to allow MPs to overclaim.

How can we, the general public, have confidence in Parliament as an institution given this new information regardless of the behaviour of the MPs we elect to leglislate through Parliament?

It matters not who we vote for if the beaurocrats (spelling?) are corrupt too?

plaggypig said...

An impeccably timed revelation.

But sacking is just the beginning Iain - where fraud has been committed the country expects prosecutions.

And while we're on the subject, we also want prosecutions for war crimes. Will Mr Cameron argue for a full independent inquiry into the lies that took us to Iraq, despite whatever objections or threats we receive from America, or is he going to settle for a whitewash and expect us to just forgive and forget?

Unless we manage to settle these issues properly then Parliament is never going to regain the kind of credibility that it once enjoyed.. look at the perpetually low approval ratings of the American Congress!

Brishank said...

At the moment the disclosures are coming thick and fast resulting in an overload of scandalous revelations.

I think, what the Telegraph needs to do now is to postpone any more disclosures so they - and others - can delve deeper into the stories and facts behind the ones already published.

This will have two immediate benefits,

1) By following up on those already published there would be an increased chance of determining the innocence or guilt of an MP.

2) The Telegraph sells more units as the story of MPs expenses takes a new in depth look at the revelations that have riled the public so much.

The Telegraph should also state that they will still be publishing more of the racketeering/abuse/thievery stories. That way the MPs who thought they'd got away with it, will still have their expenses exposed to public scrutiny.

The crooked MPs need to be brought to justice.

Eddie 180 said...

"By paying off capital I am forgoing interest and investment opportunities elsewhere,"Putting aside the legitimacy of the excess payment, and considering purely the tax angle...

The interest foregone (or other investment opportunities), insofar as the opportunities were foregone, would have been subject to normal income and capital gains tax laws. It sounds as though an arrangement was entered into between employer and employee, the result of which was to avoid the tax?

However the investment opportunities were not foregone as was claimed in the letter, the monies were in fact invested in property, in a rising property market. As we have seen, many MP's made good profits on their second homes.

Maintained by the taxpayer of course!

LM said...

are those that work in the fees office civil servants?

If so surely they are ultimately accountable to Gus O' Donnell?

Sen. C.R.O'Blene said...

"They should be named and shamed. And then sacked."

And then arrested.

And then charged.

And then put on trial.

And then sent down.

Flemingcrag said...

Follow the money into the can of worms that is the Commons Fees Office and you may well find that not only was the Speaker complicit in nodding through fraudulent claims but, also the involvememt of Governmemt Whips using pecuniary advantage as a tool to organise votes.

Alan Douglas said...

Excellent. I was waiting for this. There is no way all the scams could have happened without collusion from within the fees office.

To loosely quote Michael Martin (who he ?) "I didn't become a trades unionist to not claim what's mine".

Perhaps he needs to have the words "What's mine" defined more carefully ? He has to go.

Alan Douglas

Johnny Norfolk said...

And then taken to court.

Anonymous said...

See you Jimmy, when Mr Speaker does it it's not illegal.

strapworld said...

John Redwood named! same decorating bill, twice!

David Davis, David Ruffley now John Redwood!

The Conservative Party needs to sack people. Starting with Maude, Gove and their shadow cabinet colleagues, then all the rest of those that played the system.

Would you expect your employer to pay for your decorating? Is it really necessary to do one's job?

Would you expect your employer to purchase furniture etc.? The fact that David Cameron has banned such items shows that those who have used taxpayers money for such purposes have played the system and should go!

David Cameron must show how ruthless he can be with people now. I appreciate that some are personal friends. It is they who have let down Cameron and the party to a far greater extent. Local associations must be equally hard.

I have been a supporter of John Redwood and David Davis. No longer. They are as bad as the rest.

They could, of course, resign and maintain some honour. I will not hold my breath.

But, as you point out, there does appear to be something quite odd within the authorities at the Commons.

I just wonder if this is a massive conspiracy by which unscrupulous people can control others, by blackmail? It has the hallmarks of a mafia sting!

Anonymous said...

So it seems we -- the tax payers -- were compensating at least one MP for repaying a proportion of a mortgage.

To me this seems to be fraud on the public purse sanctioned at a very high level.

Anonymous said...

Ben was his February 1997 byelection win that heralded the start of New Labour. It`s somehow fitting that his financial shenanigans herald the death of New Labour.

Dick the Prick said...

“By paying off capital I am forgoing interest and investment opportunities elsewhere,” he told the fees office.

OMFG - unberlievable, ghasted flabber, well, err... think i'll have a cup of tea.

I don't think i've been more offended by the rest of them. Ben Chapman eh? Ben Chapman - not a treasury official is he - sounds like he's a bit over qualified.

WV: minidom - Chipmunk's bolthole?

Anonymous said...

There is a massive march planned for Parliament Sq on Wednesday - things are only going to get worse.
Brown has got to defuse the whole thing by resigning to force an election.

Martin said...

The Pigs get to feed themselves. What do we get? Even fatter Pigs.

No wonder Gorbels mick didn't want to call the Police in.

But what is the Met up to now? There is clearly enough evidence for them to investigate. And the tax man

Anonymous said...

Dave still needs to explain why he thought his wisteria claim was valid?

Anonymous said...

What does Parliament love? Precedent. After all, that's why the original Eskine May wrote the book of the same name. So what's happened here? I'd imagine that once upon a time the Fees Office had their arm twisted by an MP - or were told by the Commission - to do this because of the "investment foregone" idea. And because of precedent, once you do it for one you have to do it for all. As the Telegraph says, the staff whose e-mails are quoted here didn't like it, and thought it shouldn't have been bought in. But once it was there their hands were tied.
Then in 2004 it was ended. You can't do this anymore.
Are the people in charge of the House/Fees Office the ones who allowed this more than 5 years ago. Maybe, I don't know what their management churn rate is. Were they acting under orders from the Commission? I expect so. Did the NAO, who audit Parliament, flag this at the time? No. So should they be sacked? It's not as clear cut as you suggest.

Martin S said...

Yes. There's going to be a whole lot more trouble re the Fees Office
Fees Offcie and more to come?Latest update
The Monday Morning update. With ITN video news on the Speaker

lilith said...

Sacked? This is FRAUD. They must be prosecuted.

Dick the Prick said...

Who is Jim Sherridan? Comedically bad Toady interview following on from Vernon Bogdanor - fantastic contrast.

Anonymous said...

Dear Iain,
In your considered opinion, which I value, is it possible for the Speaker to remain the Speaker for any longer and if so where does that leave our Sovereign Lady?

Dick the Prick said...

Just realized why it hurt so much - Chappers wants the taxpayer to offset all his opportunity costs. What if he'd lost it? What then? The sheer outright shame of the man.

Mark M said...

To be honest I was waiting for someone to focus on the Fees Office.
From the past 2 weeks it’s been clear that the Fees Office is complicit in this whole affair.
Every guilty MP does not stand alone, for not only did they put in a dodgy claim, but the fees office then approved it (irrespective of green book guidelines).
We’re also hearing many MP’s caught up in this saying they had explicit advice from the fees office on what to claim for.
Heads need to roll both at MP level and behind the scenes. And yes that includes the speaker.

Anonymous said...

Where did the near £300,000 of "capital" come from to repay this mortgage?

Out, out, out said...

This is is the most blatant example of corruption yet. It is nothing more than systematic theft from the taxpayer. But who will be our Cromwell now?

Bardirect said...

And where did the £295,939 come from? Found it behind the sofa?

Anonymous said...

1) Who effectively got rid of the standards commissioner Elizabeth Filkin.
(See her letter on the BBC website)

2) Who changed the structure of Parliament so that they were in ultimate control.

3) Who was told 5 years ago by the pay office that expenses were out of control. And then told then to "Mind their own business".

Who, well they may be ousted today?

JW said...

A couple of things to note amongst the general hysteria - reading the article in the telegraph shows the clainm that the fees office agreed to the arrangement comes from Chapman himself, and that the only actual evidence presented shows the fees office rejecting his claim as being innapropriate under the rules.

Plenty said...

Integrity pledges, while honourable can always be broken. We know that politicians, when it comes to policy, tend to say one thing when in opposition then do the other when in power, so what's to say that they won't for whatever reason do the same over integrity pledges?

Also, perhaps MPs whould have some kind of lie detector test on entering public life. We know when someone is lying? Or do we?

David Hughes said...

So, besides what appears to be two or three certain cases of fraud there is now conspiracy to defraud ?
That being so, the Metropolitan Police's next move will be interesting.
It's beginning to look like the dock at the Old Bailey will need a gazebo to get them all in - surely someone's got one spare on expenses?

Weygand said...

The money must be paid back.

The Fees Office may have latitude to interpret existing rules but it has no right to make rules up.

I don't see how it could authorise reimbursement of a non existent expense and should it have purported to, if such an action was indeed ultra vires, it would not prevent the money being recovered.

Anonymous said...

It is not appropriate to keep going on about the fees office as if it was a separate, out-of-control institution. These people were servants of their masters - the House of Commons Commission - and as good servants were doing what they thought their masters wanted.
It is clear from the snippets of correspondence the DT has published that some officers were uncomfortable, but they could only press MPs as far as they were confident the Commission would back them up. Which doesn't seem to have been very far!
Parliament is sovereign; MPs are responsible for the work of the Commission; MPs and no-one else are collectively responsible for this. Stop blaming the monkeys

jafo said...

On the face of it, this certainly would be conspiracy to defraud. However - what did the Fees Office people get out of it? Surely there's no benefit to them in allowing an MP to make false claims, unless they were getting paid off too, somehow.

This needs serious - as in, proper Police - investigation. No one in the Fees Office would have had the power to authorise such claims, you can never have authority to allow others to make false claims. Surely the Fees Office people would know that only too well. So - where did they believe their authority was coming from? Who told them to do this? Is Mr.Speaker at the top of all this?

As Boris said, it's time for Plod to be called in. Now, no messing about, no "meetings" to decide whether the Met can be bothered to investigate crime, NOW.

Anonymous said...

£141,866 is both Ed Ball's salary and his wife's salary.
After the usual tax and NI is paid (I HAVE to assume they do pay THAT?!!),the total comes to £7,500 EACH per month net salary.
So £15,000 per month joint net salary in the Ball's household.
Annual net salary = £180,000
Per week = £3,461

They claim £600 per month for food.

Now,think of the pensioner who is living off an annual state pension of £4,716 per year.
= £90.70 per week.

Any savings they have saved over their lifetime as any kind of nest egg has virtually zero returns at the moment.So they are now eating into their nest egg just to pay the hugely increased utility bills,food bills etc.

Think of a 75 yr pensioner,living alone and trying to simply survive on £90.70 per week while these two MP's bank £3,461 per WEEK and then claim £138 per week (£600 per month) on food.

So the WEEKLY net income for these two characters is actually 73% of the 75 yr old pensioner's ANNUAL pension.

Feeling comfortable with the sums so far? Obviously Jack Straw will need help understanding these figures as of course "accountancy is not my strongest suit" - he is, after all, only the Justice Minister.

Or perhaps another way of looking at it is this;

Balls and wife claim ONE AND A HALF times more, for their food every week,than a pensioner gets every week to live off.

Now think of those people who are trying to earn a living and are paid the minimum wage - the kind Mr & Mrs Ball's have helped to ensure they have another 7 PENCE per hour........

Still feel comfortable?

Of course,if any of these calculations are incorrect (I have checked them several times),I will revert to Mr Ball's excuse - "I made a mistake / it was an error".

Anonymous said...

The allowances system is undoubtedly generous, but if the Fees Office had enforced the Wholly, Exclusively and Necessarily restriction as zealously as HMRC, there would have been far fewer stories for the Telegraph. What have most of the published disbursements to do with MPs doing their job?

Anonymous said...

It did not just get a whole lot worse - the involvement of the fees office has always been apparent - you even bolgged about it a few days ago (14/5) when I posted as follows.

"The staff of the fees office should be interviewed by the police, under caution. It is quite plain that they have either been complicit in a massive and on-going fraud, or that they have been nullied/bribed or blackmailed into looking the other way. There is no way theyhave done their job with the dilligence required and that would be ingrained in a life-long Civil Servant like Andrew Walker.
The police should not wait to talk to the commons authorities about this they should do it NOW. if there is nothing in it they can apologise afterwards, like they do with 'terorists' arrested at dawn at gunpoint.
I think this would open up the whole saga.

May 14, 2009 1:13 PM"

As a former investigator to me this was a no brainer.

Cinna said...

This is disgraceful. If true, all involved must surely be guilty of conspiracy to defraud.

TwoIfBySea said...

Sorry but who has this kind of money just lying around to be able to make such a payment in the first place?

Disgraceful doesn't even remotely describe it.

Shame on anyone who could be so duplicitous.